Oilfield services provider Petrofac has received a provisional letter of award from Algeria’s Sonatrach for an engineering, procurement and construction (EPC) contract worth US$600 million on the Tinrhert field development. Formal contract signing is expected to take place later this month, Jersey-based Petrofac said in an August 29 statement.
Located in Ohanet, in the commune of In Amenas, Illizi Province, around 1,500 km southeast of Algiers, the 36-month contract involves Petrofac providing a new inlet separation and compression centre. The scope of work also includes a pipeline network of approximately 400 km to connect 36 wells, along with commissioning, start-up and performance testing of facilities.
The Tinrhert licence comprises 17 wet gas fields located in southeast Algeria, many of which were discovered in the 1950s and 1960s without being developed. Petro-Canada made several further wet gas discoveries in the 1990s but, again, did not follow through into development. Tenders were issued for development of the fields in 2001 and 2005, but no contracts were awarded. One plan for the field included a gas-to-liquids (GTL) plant. State-owned Sonatrach is developing the block on a sole equity basis and achieved first production in 2018.
“This award builds on Petrofac’s significant track record in Algeria where we have been working in support of the country’s oil and gas production for more than two decades,” said the company’s group managing director for engineering and construction, ES Sathyanarayanan. “We have continued to grow our presence in-country through a number of major EPC and engineering services contracts with Sonatrach, including the Alrar and Reggane projects that commenced production this year,” he added.
Sonatrach is planning to invest US$250 million to increase gas production at Tinrhert to 20 mcm per day by 2020, from the existing 5 mcm per day, Reuters reported in March, citing a statement from the company’s CEO, Abdelmoumen Ould Kaddour.
Amendments to Algeria’s hydrocarbons law are expected to be presented in early 2019.